Traditional finance walked so that decentralized finance could run.
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Decentralized finance (DeFi) has experienced an unreal uptick unlike amid the chaos of 2020s crumbling global economies.
Last year’s warmer months are now known as the “DeFi Summer” because the total value locked into their smart contracts rapidly grew, from a few hundred million to more than $20 billion in a matter of months.
Decentralized Finance, as the name implies, operates independently while not relying on traditional intermediaries such as banks and insurance funds. The need for these intermediaries becomes eliminated, thanks to the user’s ability to invest, trade, transfer and conduct peer-to-peer transactions using cryptocurrencies along with digital assets.
The growth of DeFi
Ethereum launched in 2015 and quickly started attracting developers who wanted to build all kinds of decentralized applications, from financial applications to games (such as the viral CryptoKitties).
Fast forward to 2017, when ICOs on Ethereum became prevalent. This domicile to digital money, global payments and applications have led to some of the most notable DeFi projects of the ICO era. It was from this point forward that it became clear that the public was warming up to DeFi. Billionaire entrepreneur Mark Cuban compared the growth of DeFi to the early days of the Internet:
“You’re starting to see NFT (non-fungible tokens), and it’s not so much about just about how much is sold, market value, but more just that people are becoming more comfortable with it and so we’re starting to see these applications that are just popping up left and right. It reminded me so much of the early days of the internet where, in the mid-90s, people started talking about internet applications but the internet had been around for ten years.”
Cuban is a believer in DeFi’s power and potential, especially considering the new all-time highs of token prices being reached by Ethereum, and so-called “Ethereum killer” protocols such as Polkadot and Solana.
Of course, DeFi isn’t only about the prices of platforms’ native cryptocurrencies. TrustToken, for example, also recently launched its TrueFi protocol for uncollateralized on-chain lending on Binance. The protocol essentially lets people borrow money without locking up their crypto as collateral, which…
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